US Stocks: Dell shares jump 17%, hit 3-month highs on forecast it will double AI server revenue

Investors also cheered the PC maker’s plans for a 20% hike to cash ​dividends and an additional $10 billion share repurchase program.

Dell’s shares surged to a three-month high. Trading at $142.31, it ​was on track to mark its biggest one-day jump in nearly two years.

Data center equipment makers such as Dell have benefited from the rapid expansion in AI investors, with sector leaders expected to spend at least $630 ⁠billion this ‌year.

Dell said it expects AI server revenue to grow ​103% to ​about $50 billion in fiscal 2027.

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At least seven Wall Street brokerages ⁠raised price targets on the stock, with J.P.Morgan expecting it ​to rally at least 36%, from Thursday’s close, in the ​next one year to $165.
Dell’s ability to navigate cyclical challenges stems from its leadership position in AI compute for Tier 2 Cloud and Enterprises, where the significant revenue inflection is able to provide the company a lot more flexibility in managing operating margin and earnings outcomes, analysts led by Samik Chatterjee at J.P.Morgan wrote in ‌a note.Dell’s other big business, PC manufacturing, is navigating higher memory chip costs, as companies shift resources to building AI data centers.

However, the company has been able to ⁠deal with rising prices better than rivals such as HP Inc and China’s Lenovo Group.

The surging costs could hit Dell’s gaming PC business as memory processors are essential to ​videogame systems, enabling quick load times, smooth frame rates and overall performance.

Market researcher TrendForce upwardly revised its first-quarter 2026 Dynamic Random Access Memory price growth rate to 90% to 95% from the previous quarter.

Dell’s shares have starkly outperformed those of HP and Lenovo over the past one year.